Soumission à la procedure de consultation sur l’Accord entre le Conseil fédéral suisse et le Gouvernement de la République d’Indonésie concernant la promotion et la protection réciproque des investissements (API)

The International Institute for Sustainable Development (IISD) analyzes the 2022 Switzerland-Indonesia Investment Promotion and Protection Agreement (API). While noting innovations in limiting 'treaty shopping' and excluding speculative profits from expropriation compensation, the IISD argues the agreement remains problematic. Key concerns include a climate-neutral definition of investment, unpredictable 'fair and equitable treatment' standards, insufficient protections for the state's right to regulate in the public interest, and a dispute settlement mechanism that allows direct access to international arbitration without exhausting national remedies. The IISD recommends that Switzerland adopt more stringent sustainability criteria and stronger investor responsibility mechanisms in its future treaties.

• The API introduces notable innovations to address criticisms of older treaties, including a strict definition of 'investor' requiring three cumulative criteria—place of registration, head office location, and substantial economic activity—to limit 'treaty shopping'.
• The definition of 'investment' is criticized for being climate-neutral, as it does not distinguish between high-carbon polluting investments and low-emission ones, thereby failing to support the phase-out of coal and other fossil fuels.
• The 'fair and equitable treatment' (FET) standard remains unpredictable because the API allows arbitral tribunals to consider the 'legitimate expectations of the investor', a concept the IISD describes as difficult to grasp.
• General exceptions based on GATT Article XX for health and environment are deemed ineffective in practice, as they may not prevent a state from having to pay compensation for legitimate public interest measures.
• Provisions regarding Corporate Social Responsibility (CSR) and anti-corruption are merely exhortatory, lacking enforcement mechanisms or legal consequences for violations, such as excluding corrupt investors from treaty protection.
• The agreement grants investors direct access to international Investor-State Dispute Settlement (ISDS) arbitration without requiring the prior exhaustion of local remedies in national courts.
• While the API requires transparency regarding third-party funding (TPF), it does not restrict problematic forms of funding, such as those with speculative financial interests in the outcome of the dispute.
• The code of conduct for arbitrators fails to address the 'double hatting' issue, where a single individual serves in multiple roles (e.g., arbitrator and counsel) across different cases.
• The API includes a problematic survival clause that allows the obsolete 1974 agreement to remain effective for certain investors for up to one year after the 2022 agreement enters into force.
• The API innovates by explicitly excluding 'speculative or exceptional profits' from the calculation of fair market value when determining compensation for expropriation.

APA

International Institute for Sustainable Development (2022). Soumission à la procedure de consultation sur l’Accord entre le Conseil fédéral suisse et le Gouvernement de la République d’Indonésie concernant la promotion et la protection réciproque des investissements (API). https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf

Chicago

International Institute for Sustainable Development. Soumission à la procedure de consultation sur l’Accord entre le Conseil fédéral suisse et le Gouvernement de la République d’Indonésie concernant la promotion et la protection réciproque des investissements (API). 2022. https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Soumission à la procedure de consultation sur l’Accord entre le Conseil fédéral suisse et le Gouvernement de la République d’Indonésie concernant la promotion et la protection réciproque des investissements (API) |date=September 2022 |url=https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2022soumission, author = {{International Institute for Sustainable Development}}, title = {{Soumission à la procedure de consultation sur l’Accord entre le Conseil fédéral suisse et le Gouvernement de la République d’Indonésie concernant la promotion et la protection réciproque des investissements (API)}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = sep, url = {https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }